Description: This exemption exempts
successive sales of concentrated syrup used to produce carbonated beverages from the syrup
tax, thereby assuring that the tax is paid only once on a specific product.

Purpose: To avoid taxing the same product
twice.

Category/Year Enacted: Not intended in the
tax base; 1989.

Primary Beneficiaries: Retailers and
wholesalers of carbonated beverages who use syrup.

Conflict With Other Programs: None
evident.

Tax
Savings ($000):

FY 2000

FY 2001

FY 2002

FY 2003

State taxes

9,068

9,068

9,249

9,249

Local taxes

- -

- -

- -

- -

If the exemption were repealed, would the
estimated revenue be realized? Unlikely; there would be substantial double taxation of the
same product without this exemption and this is not intended.

82.64.030(2) EXPORTED SOFT DRINKS

Description: Exemption is allowed for soft
drink syrup that is shipped out of state.

Purpose: To limit the tax to syrup used
for soft drinks that are consumed within Washington.

If the exemption were repealed, would the
estimated revenue be realized? Yes, although the tax is intended to apply only to products
consumed in-state.

82.64.030(3) TRADEMARKED BEVERAGES

Description: This subsection of the
statute exempts the wholesale sale of trademarked soft drink syrup to bottlers who are
licensed to bottle the trademarked beverage. Thus, the tax will instead be paid by the
next purchaser of the syrup, either a wholesaler or retailer.

Purpose: To shift the tax from the bottler
to the wholesaler so that the incidence of the tax is consistent with other sales of
carbonated beverage syrup.

Category/Year Enacted: Not intended in the
tax base; 1991.

Primary Beneficiaries: Bottlers of
trademarked beverages.

Conflict with Other Programs: None
evident.

Tax Savings ($000): None; the tax
incidence is simply shifted to the next purchaser.

82.64.030(4) PRIOR POSSESSION

Description: This exemption restricts the
soft drinks syrup tax to the wholesale level, if the previous first possession tax has
already been paid before June 1, 1991.

Purpose: In 1991 the nature of the
carbonated beverage tax was changed so that the wholesale transaction was taxed rather
than the first possession of the product. This exemption precludes double taxation of the
same product if the prior tax was paid but the product was not sold at wholesale until
after the change in the law. Thus, the purpose is to maintain revenue neutrality.

Category/Year Enacted: Not intended in the
tax base; 1991.

Primary Beneficiaries: Manufacturers of
soft drinks who paid the first possession tax.

Conflict With Other Programs: None
evident.

Tax Savings ($000): None; this exemption
is no longer applicable.

82.64.040 CREDIT FOR OTHER TAXES

Description: Allows a credit for the
amount of any taxes similar to Washington's soft drinks syrup tax that is paid in other
states.